Why are savings accounts for children important?

Savings account these days have become more and more popular given the frequent fluctuations in the economy. Starting saving account for children early can help manage financial situations a lot better. Developing the early habit of savings is very important for children so that they are better equipped to manage finances in the future. They can fulfill their dreams and complete college education if the financial aspect is preplanned.

Many banks offer attractive schemes and plans for children’s savings accounts. Most banks give a joint account facility for children who are above 12 years of age. But for children who are not yet old to have a joint bank account, a parent or a guardian can act as the account holder. Attractive interest rates, easy withdrawal facilities and special college savings schemes are some of the offers that a children’s savings account can have. If the savings account is opened for completing college education, then some banks may offer special interest rates on the savings.

Opening a savings account for children is a great way to teach them about banking and managing the savings. Letting them withdraw the money, and setting savings targets are some easy ways to help them cultivate the savings habit. Some banks offer special incentives in children’s accounts if there are no withdrawals for the month or there are more than five deposits. Many banks have child friendly accounts where they are given facilities like money boxes, choosing their own account names and even customized withdrawal leaves.

Some banks have a restriction on the amount of withdrawals that can be made on the children’s savings account. Some banks do not allow children who are below the specified age to make withdrawals from the savings account. Some banks have minimum of one deposit per month that has to be mandatorily made. Different banks have different rules and requirements for children’s savings accounts.

Finding a bank that has child friendly features but do not impose a lot of restriction is important to give the child a fruitful banking experience. Also, the minimum balance requirements should be lenient and flexible. The minimum deposit per month also should be flexible since there may be some months when other financial needs may crop up.

Having a savings account will help the child sail through college without having financial trouble. Because the savings account will be started much early, it will not be a burden on parents too, to fulfill the child’s educational requirements.